Oil Indicator

Energy

Economics

House of Representatives’

 Hearings

How to get Central Asian Oil & Gas

 Before

Russia or China

Make no mistake: one of the main focuses of the U.S. government is to keep crude oil flowing, because without oil, civilization as we know it collapses. 

This is because the transportation that matters most – heavy-duty diesel-engine trucks (tractors, harvesters, 18-wheelers, cranes, construction, logging, etc), rail, and ships, don’t run on electricity.  They run on oil. This hearing focuses on Central Asia.  As Zeno Baran, director at the Center for Eurasian Policy at the Hudson Institute notes:  “On the United States energy interests in Central Asia, I think we see Central Asia energy infrastructure and resources once again becoming a source of competition for great powers”.

  Ms. ROS-LEHTINEN. The developments in Central Asia are of a tremendous significance to United States energy and security interests in the region. Since gaining their independence from the Soviet Union in 1991, United States focus on Central Asia has increased dramatically, as indicated by American efforts to protect the sovereignty, freedom and democracy of these newly independent states.

DYI:  Oh please who are we kidding?  Since the end of WWII I’ve seen very little effort or concern by the U.S. in spreading democracy or freedom.  What representative Ros-Lehtinen (R) of Florida should be talking about is America’s appalling past abuses of foreign countries instead of pandering feel good propaganda.   

Unfortunately, the region’s ability to profit from their energy resources in the past has been limited by Russia’s monopoly over transporting Central Asia’s oil and gas.

DYI:  Pipeline monopoly allows Russia to exert geopolitical control over their sphere of influence.  This has cut the U.S. out of this reserve necessary to propel our economy – hence all the negative Russian rhetoric.  This is simply an oil and gas grab as I’ve reported on previously.

By continuing to support diversification of pipelines, we will ensure a free flow of energy supplies to Western consumers and expand Central Asia’s economy through investment and development. We will ask our witnesses today to describe the range of U.S. energy concerns and energy interests in the region, in themselves, and their relationship to broader U.S. strategic objectives and needs. 

Russia and China have intensified their efforts to isolate the United States politically, militarily and economically from Central Asia. 

DYI: Russia is not only attempting to isolate the U.S. politically, economically and militarily this includes the Alliance [U.S. U.K. NATO EU] as well.  Russia’s end game is to have Europe AND China dependent upon Central Asian/Siberian oil and gas.  If successful, Russia will have the energy on/off economic switch for the economies of Europe and China. Russia will be able to dictate all macro geopolitical decisions for Europe and China.       

Moscow and Beijing were successful in convincing the Uzbek leadership that the United States sought to overthrow their government. This resulted in the closing of an American military base in Uzbekistan last year. Though unsuccessful, similar efforts were made by 

Russia and China to pressure Kyrgyzstan to close a strategic United States air base in its country that is currently being used in the counter-terrorism efforts in Afghanistan. 

DYI:  Counter-terrorism in Afghanistan??  What total B.S.!  The main reason we attacked was/is for the CIA to get the opium/heroin trade going.  Plus Afghanistan is a geopolitical pivot point for Central Asia.    

If we allow ourselves to be marginalized by Moscow and Beijing, we could lose our influence in the region and could fail in achieving our immediate security goals and protecting our energy interests in Central Asia.

DYI:  Our interest??  The hell if it is!  Representative Ros-Lehtinen (R) of Florida just come out and state categorically the U.S. is going to grab the oil and gas before Russia does!  Further, state that without low cost energy world economies will collapse; the U.S. will NOT be the exception.

Oil Indicator

3/1/17
Updated Monthly

Oil Prices: 
03/01/16....$34.49

02/28/17....$55.47   

UP 61%(rounded)
(oil prices approximately one year earlier due to weekends & holidays)
ANS West Coast prices   

 OIL INDICATOR:  Negative  Oil indicator will remain negative until it rise is less than 10% from one year earlier.

Oil prices are well known for their volatility in the short term, longer term due to dwindling reserves energy prices are in a secular bull market.  Technologies such as fracking will extend the life of oil fields but major new discoveries arrive at a snails pace far slower than the world's growth.  

As long as prices rise in a slow and orderly pace our economy can adjust to those changes, however if prices spike (international tensions, war etc.) high energy costs behave as a massive deflationary tax. This will send our economy tumbling down and very possibly the U.S. stock market.

If oil prices rise greater than 75% from one year earlier, investors at that time should shift their portfolio geared towards deflationary times.  This would be an oil indicator as negative.

If oil prices rise from one year-earlier less than 10% or drop then the inflationary play is in effect; a positive for economic growth along with possible higher stock prices.

Where to find one year-earlier oil prices?  Alaska Department of Revenue    

Oil indicator positive                
20%  REIT's
20%  Energy
20%  P.M.'s
40%  Small Caps
  0%  Lt. Gov't Bonds

Oil indicator negative
  5%  REIT's
10%  Energy
10%  P.M's
10%  Small Caps
65%  Lt. Gov't Bonds

Vanguard Funds

REIT's
REIT Index Admiral  VGSLX

Energy
Energy Fund  VGENX

Precious Metals (P.M.'s)
Precious Metals and Mining Fund  VGPMX

Small Caps
Small Cap Value Index Admiral  VSIAX

Long Term Government Bonds
Long-Term Government Bond Index Admiral  VLGSX

Disclaimer

This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.

This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!

The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.

The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.

Use this site at your own risk.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.   

Free Press

(and Free Citizens)

Under

Attack

$53M Fines for Politically Incorrect Social Media Posts?

In a move designed to chill free speech, a German “justice” official has proposed fining social-media sites up to $53 million for not swiftly deleting “hateful” posts. 

Welcome to the new Germany, 

same as the old Germany.

The latest proposal is über-intrusive, too, requiring “companies to provide around-the-clock service for users to flag illegal content, which would have to be removed by the site within seven days. All copies of the content would also have to be deleted and social media companies would need to publish a quarterly report detailing how they have dealt with such material,” the AP also informs. 

Most chillingly, sites would be forced to “nominate” a person to field complaints; this individual could personally be fined in excess of $5 million if his employer doesn’t satisfy mandatory standards, according to the AP. What kind of masochist would want such a job remains to be seen, but one would imagine only the most handsome compensation could induce someone to assume such risk.

 What really drives these hate-speech laws is not hate of hate, but FEAR of Truth. 

As to this, note that one of the organizations in the German task force that analyzed online content is "Network Against Nazis.” It’s headed up by a woman who was an informant for the STASI — the secret police of the East German communist government. 

Yes, welcome to the new Germany — same as the old Germany. 

DYI

How to Use this Blog

Four Uncorrelated Assets

1.)  Stocks

2.)  Long Term High Grade Corporate/Government Bonds

3.)  Short Term Notes (Cash)

4.)  Gold – Precious Metals Mining Companies

Four Assets Correlated to Four Economic Conditions

1.)  Prosperity

2.)  Deflation

3.)  Recession

4.)  Inflation

1.)  Prosperity: Stocks become a clear winner during conditions of increasing employment, rising wages tied to increasing productivity along with rising profits.  Junk bonds (they trade like stocks) are also winners in this environment despite their low quality; the economy is so good interest and principal payments are made – defaults are minimum – and a positive climate for refinancing.  High quality corporate/ government bonds are secondary winners as prosperity is noted for stable or slowly declining rates.  Gold is generally a loser in prosperity as inflation is minimized and investors seek higher returns in more traditional investments.

2.)  Deflation:  Deflation is the decease in the general price level of goods and services.  The Great Depression is a standout example of deflation.  The general cause is when excess debt is built up in the private sector that can no longer be increased and/or maintained resulting in massive bankruptcies.  This creates an environment of panic as businesses scramble to become profitable by firing employees and cutting hours of remaining workers.  In this deflationary episode interest rates decline, prices decline, and the almighty buck rises in value against softer currencies.

Long term high quality corporate bonds and long term U.S. government bonds are winners in this type of economy.  Stocks, gold, and junk bonds generally will fall in price along with interest rates on short term notes.

3.)  Recession:  For DYI's purposes recessions are a period of increasing interest rates engineered by the Federal Reserve in order to quell inflation by slowing down an over heating economy.  This condition is temporary as the economy will either adjust to the new economic environment bringing back prosperity or a deflationary period will begin.

High quality corporate/government bonds, stocks, gold, and junk bonds are all losers in this scenario. Short term notes and money market funds are clear winner as their principal value remains steady plus the interest income improves with the increasing interest rates.

4.)  Inflation:  Too much money chasing too few goods.  When Federal government liabilities become onerous from financing of war(s) and/or social programs that are too great to be paid by taxation governments will resort to money creation to pay the remaining costs.  After WWII, Korea, Vietnam and the war on Poverty inflation began slowly prices increased relentlessly (despite high taxes) as government liabilities expanded.  When President Richard Nixon closed the gold window (1971) the last vestige of inflationary controls were removed with inflation peaking in the high teens only until Paul Volker was appointed as Fed Chairman (August 79) who crushed inflation with high interest rates.

Stocks, high quality long term corporate/government bonds, junk bonds are all losers as inflation soars along with interest rate increases (despite the Fed's efforts to suppress them).  Cash (money market funds) or short term notes are neutral or slightly lag inflation rolling up to the higher interest rate quickly.

Gold is a winner when inflation breaks above 5%.  When inflation goes double digit gold is marked up in price to reflect the debasement of the currency.  Gold will also rise in price based upon fear of massive defaults as gold has no counter party risk.

 VALUATIONS DO MATTER

This investment approach is an offshoot of Harry Browne's Permanent Portfolio which maintains a fixed 25% invested in the above four asset categories listed above.  Harry's uncorrelated assets at the time were ground breaking.  Today it is now taken for granted.  As much as I was impressed with Harry's work it always made me uncomfortable to always own 25% in each asset. When valuations are at extreme lows a greater percentage in called for and conversely at historical nose bleed levels significantly less.

The DYI’s approach working through our four assets and determining with some measure of accuracy the percentage invested depending upon long term valuations.  This is done by calculating our averaging formula for each asset.  Excluding cash DYI will adjust its allocation from a range of 0% to 60%.  There is a bull market among these four assets and yet with only the maximum of 60% not exposing yourself to undue risk.

Will DYI outperform the market??

A strong MAYBE!  What I can tell you is a much smoother ride than the fully invested stock market, long term bond, cash equivalent, gold investor.  Each of those investments has their moment of fame or shame.  Value players reduce or eliminate the overvalued assets and increase the undervalued; simple as that!

  Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 3/1/17

Active Allocation Bands (excluding cash) 0% to 60%

74% - Cash -Short Term Bond Index - VBIRX

22% -Gold- Precious Metals & Mining - VGPMX

 4% -Lt. Bonds- Long Term Bond Index - VBLTX

 0% -Stocks- Total Stock Market Index - VTSAX

[See Disclaimer]

 This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.

This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!

The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.

The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.

Use this site at your own risk.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.   

DYI

The

Lunatic

Left

Rachel Maddow Turned a Scoop on Donald Trump’s Taxes Into a Cynical, Self-Defeating Spectacle

DYI:  The lame stream press did not deliver the goods electing Hillary Clinton into the White House.  Soon the purge will begin as Rachel Maddow’s corporate masters begin rearranging the deck chairs of the titanic lobbying news organization MSNBC.  I have a bet with myself (a nice steak dinner) Rachel Maddow will be the first to go.  This latest desperate ratings troll works great short term but is devastating over the long term.  What is left of Rachel’s ardent followers she will soon be seen as nothing more than a carnival barker; once that core is gone, so will Rachel from MSNBC.  Most likely she will end up at some big city local affiliate but held to a tight rope.  Her days as a national lobbyist/reporter – what little there is as MSNBC is a back woods ratings disaster – WILL END!

DYI

Bubble

News

$21,714 For Every Man, Woman And Child In The World – This Global Debt Bomb Is Ready To Explode

According to the International Monetary Fund, global debt has grown to a staggering grand total of 152 trillion dollars.  Other estimates put that figure closer to 200 trillion dollars, but for the purposes of this article let’s use the more conservative number.  If you take 152 trillion dollars and divide it by the seven billion people living on the planet, you get $21,714, which would be the share of that debt for every man, woman and child in the world if it was divided up equally. 

We are living during the greatest debt bubble in the history of the world, and our financial engineers have got to keep figuring out ways to keep it growing much faster than global GDP because if it ever stops growing it will burst and destroy the entire global financial system. 

Bill Gross, one of the most highly respected financial minds on the entire planet, recently observed that “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”.

“The Powers That Be Have Looted Everything.” Greek Farmers Fight Riot Police With Shepherd Crooks

The economic and social disintegration of Greece used to be big news. However it’s largely been overshadowed by the migrant crisis, and the American media hardly reports on Greece anymore. If you’ve been out of the loop, allow me to get you caught up on the financial situation in that country, by giving two answers to the questions you’re probably thinking.  1.) Yes, the Greek government still sucks.  And 2.) the people of Greece are still really pissed off. 

Believe it or not, riots are still a common occurrence in that country. In fact there was an incident last week in Athens, after the government tried to increase taxes and social security contributions. In response, over a thousand farmers from Crete, who used to be immune from these taxes, took a ferry to Athens and proceeded to riot outside of the agriculture ministry building. 

This however wasn’t an ordinary riot, not even by Greek standards. The farmers fought the riot police with shepherd crooks.

 

DYI:  Click the above article there is a 3 minute video farmers with their shepherd’s crooks attacking the police.  Stunning to say the least and yet a bit comical if it were not for the serious situation the Greeks find themselves in today.  

The Greeks need to pull out of the EU go back to the drachma – original Greek currency – devalue to reduce their debts and reduce labor costs that will cause a two to three year short term massive hardship but once completed growth will resume.  Not a pretty picture but far better than drowning Greek society through a two and possibly three decades deflationary slow motion smash. 

This is Worse than Before the Last Three Crashes

by Wolf Richter • Mar 4, 2017 •

Everyone has their own reasons for their boundless optimism or their doom-and-gloom outlooks. But there are some factors – boundless optimists should push them aside assiduously – that, from a historical point of view, would trigger tsunami sirens. Because in the end, it’s not different this time. And the cycle of “multiple expansion” and “multiple compression” is one of those factors. 

 

Earnings have been flat since 2011! The other day, I posted a chart that showed that earnings of the S&P 500 companies in Q4 2016 were back where they’d been in Q4 2011. So five years of earnings stagnation. Yet, during those five years, the S&P 500 index soared 87%!

 DYI

Maduro

The worst kind of Socialist

The True Believer!

Venezuela’s Dictator Fires Head of Central Bank; Inflation at 1,600 Percent

For months The New American has tracked the retrogression of a country which was once one of the leading economies in South America to a banana republic where people are starving, sick people are dying for lack of care, and a black market has replaced a once-thriving free economy.

Last June, the New York Times was finally forced to admit the cause:

The threats Venezuelans face today are not the result of foreign or domestic conspiracies [as charged by Maduro], but Mr. Maduro’s disastrous leadership. On his watch, the country’s health system has atrophied so severely that scores of Venezuelans are dying every week because of chronic shortages of medicine and ill-equipped hospitals….

This crisis has exposed the hollow promise of socialist policies Mr. Maduro and his predecessor, Hugo Chávez, have peddled since the late 1990s.

In the summer of 2016, Maduro removed all pretenses by giving control of what was left of the food chain to his number one military commander, calling the move the Great Sovereign Supply Mission. Once government controlled the food supply, it controlled the people. It also allowed those in the military the opportunity to overcharge for the food, engaging in graft of historic proportions.

The natives became restless, evidence by food riots, long lines of citizens waiting to buy whatever might be left on the shelves of grocery stores, and political pushback. Poltitcal opponents of the president thought there was enough left of the country’s constitution to vote Maduro out, but alas, it was too late. Maduro had replaced members of both the Supreme Court and the Electoral Council with his cronies. He the began rounding up members of his opposition, many of whom simply disappeared.

DYI:  The only recourse for this beleaguered country is now revolution; the only question is when!

DYI

The underling problem is the Medical Industrial Complex not the insurance per se. No doubt Obama Care is a piece of crap… the HUGE problem is with the industry itself.

Make

America

Great Again

Health Care Reform

1) Put an end to the medical industrial complex.  This industry colludes, conducts price fixing and forms monopolies all to the obvious determent of the American citizens.  Underling health care costs are leaping at a staggering 9%⁺ per annum rate.  Reform does not require congressional action.  The Robinson/Patman, Clayton, and the granddaddy Sherman antitrust acts have been passed over 100 years ago enforce these laws and the underlining cost will drop by 75%.

2) The American Medical Association has colluded with government and universities to create an artificial shortage of doctors in order to “jack up” the pay for physicians.  Again no legislation is required only enforcing the above antitrust acts.

3)  Allow re-importation of American made pharmaceutical drugs and foreign competition dropping costs by 50% for drugs under patent and 90% for generics.

4) Repeal and replace Obama Care with health savings accounts.  Allow insurance companies to cross state lines and allow foreign competition as well.  It is no accident this suggestion is last as the biggest savings are reforming the underlining industry with the free market.  No doubt Obama Care is terrible legislation – as it was design to fail – in order to bring in a single payer plan under Hillary Clinton thereby feeding the medical industrial complex with unlimited tax dollars.

    DYI

Haircut Day

For the

Dictators Club

White House Seeks to Cut Billions in Funding for United Nations

State Department staffers have been instructed to seek cuts in excess of 50 percent in U.S. funding for U.N. programs, signaling an unprecedented retreat by President Donald Trump’s administration from international operations that keep the peace, provide vaccines for children, monitor rogue nuclear weapons programs, and promote peace talks from Syria to Yemen, according to three sources.

The push for such draconian measures comes as the White House is scheduled on Thursday to release its 2018 budget proposal, which is expected to include cuts of up to 37 percent for spending on the State Department, the U.S. Agency for International Development (USAID), and other foreign assistance programs, including the U.N., in next year’s budget. The United States spends about $10 billion a year on the United Nations.

If Washington fails to honor its funding commitments to the U.N.’s regular budget, which is obligatory, it could lose its voting rights in the General Assembly. U.N.-based diplomats say it is unlikely that other foreign donors would fill the entire gap in the event of massive U.S. cuts. For instance, European powers, including Germany, may step up funding to address the Syrian crisis, which has sent massive waves of refugees across European borders, but they are not likely to muster the funds to match American funding on a range of other programs, including international development and peacekeeping.

DYI:   Oh cry me a river of tears for the dictators club who want these programs and more so they can skim off the top for their personal gain plus shovel money to their core supporters in order to stay in power.  The UN is a scandal ridden organization, ranging from UN troops who are notoriously known for raping – women and children – pillaging villages and towns perpetrating war crimes, enforcing populous’ to succumb and submit to totalitarian governments.

From day one the United Nations true mission is a one world government run from behind the scenes for the benefit of the world’s elites.  This is not some “conspiracies theory” it is a known fact for anyone caring to do a small amount of research.  This is why the UN is pushing hard for a world wide carbon tax bringing in trillions to fund a world military, police force, and bureaucracy to enforce and administer their totalitarian governmental schemes.

Donald Trump should push Congress hard to pass the American Sovereignty Act (HR 193) divesting ourselves, once and for all, from the one world government dictators club saving Americans their sovereignty and a ton of money as well.

The UN building should be put up for sale – ASAP!

DYI

Where have all

the men gone?

American Men Are Giving Up On Jobs

I’ve written about this before, but there are 10 million American males between the age of 24 and 64 who have literally dropped out of the workforce. It means that they have given up on finding a job or are simply not looking. 

But, focusing on just one subset among those who are 24–64, we see that white working-class males’ labor force participation rate has dropped to 59%. 

Among the 10 million men not in the workforce—men who are not even looking for a job—57% of the Caucasian population between 21 and 55 collect disability benefits, which means they can get Medicaid benefits and cheap narcotics. 

Opioid addiction has become rampant in 50-something men. 

For the first time in the last 250 years of history, we are watching the probable longevity rates within a demographic segment of the population fall.  

That specific demographic is working men in their 50s, and the main causes of early death in this cohort are alcohol, drug abuse, and suicide.

DYI:  The lunatic left continues to scream “white privileged men” obviously facts are not their mainstay.  As technology continues to displace low skilled jobs unless the displaced gets “skilled up” they will be competing for the remaining low skilled work.  This competition will be based upon price.  In other words – LOWER WAGES further acerbating the problem.  This is a world wide phenomenon affecting the low skilled but mid to high level as well.  Job displaced – unemployment due to automation – is now world wide especially in 1^st world countries (that’s where the money is). 

This is the main reason why the birth rate has dropped so precipitously especially in 1^st world countries parents need to have their children well educated to be firmly placed into the middle class.  That requires time, up to the age 25, and tons of money hence smaller families.

This evolution of technology is not going away any economic ideas will only be patch work reducing the effects.  This has been exaggerated due to the ever present Baby Boomers, as they begin to exit the work force in statistical significant numbers in the 2020’s this technology jobs displacement will be significantly lessened.  However, it is not going away ever!

DYI

Socialist

Utopia?

As Millions Of Venezuelans Try To Flee The Country They Run Into A Problem

While shortages of basic foods, medicines, and toilet paper may be a major societal problem, the people of Venezuela face an even more existential problem: the nation now lacks the materials to meet the soaring demand for new passports – making it almost impossible to leave the socialist utopia. 

Maduro has acknowledged the issue of the chronic shortages in passports and last week launched a new “online” option that will rush a passport to customers within 72 hours for about double the price of waiting in line. The website, however, has crashed numerous times and it is unclear how many passports have been expedited through this process. Saime has stated that the backup in processing passport applications is because the agency lacks enough “materials,” but did not specify what that means. Observers say that while the government may not be able to afford the paper to make the passport. Paper products in the country, including toilet paper, are in short supply in Venezuela. But skeptics think the Maduro government may also be trying to keep people from leaving the beleaguered nation.

DYI:  Maduro is the worst type of socialist – THE TRUE BELIEVER!  He is constantly bewildered that his policies are not creating the socialist utopia that he was promised.  Maduro is on borrowed time he will either be rejected by the ballot box or revolution as no country will tolerate this level of abuse for eternity especially in the internet age.  By the time socialism ends Venezuela will lose 25% to 40% of their population.

Have you noticed Bernie Sanders no longer discuss’ the future socialist utopia of Venezuela?  A great question to ask old Bernie at his next town hall meeting!

DYI